Leap in Medicaid rolls sends deficit soaring Recession has forced more to use program

November 27, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- Thousands of Marylanders unable to make ends meet during this recession have turned to the state to cover their medical expenses, a trend that has rapidly driven up the state's budget deficit by another $40 million to an estimated total of $190 million.

The revised deficit figure, presented to a panel of lawmakers yesterday, sparked calls for a major restructuring of the Medicaid program and expressions of frustration that state spending is out of control.

Gov. William Donald Schaefer and legislative leaders are exploring ways to get the state's budget back into balance, a politically painful task that surely will include more program reductions, employee layoffs and possibly even tax increases.

More than 6,000 poor Marylanders applied for Medicaid benefits in October alone, raising total enrollment in the combined federal-state program to 423,000.

When the state prepared its budget for fiscal year 1992, it projected an average daily enrollment of only 370,000.

"Medicaid, if it keeps going in the direction it is going, will drive states into bankruptcy," predicted Nelson J. Sabatini, state health and mental hygiene secretary.

But yesterday's grim news produced no specific solutions. By the time delegates and senators who make up the 26-member, ad hoc Legislative Budget Workgroup adjourned their meeting, members were sniping at each other for failing to make the hard decisions needed to resolve the state's budget crisis.

"I have a feeling this group could sit around and pontificate until the end of the world and nothing would get done," complained Senate Minority Leader John A. Cade, R-Anne Arundel.

The committee, dubbed the "Gang of 26" by some, was formed to work with Governor Schaefer to devise an overall solution to the state's budget problem, which, according to yesterday's updated figures, now involves a combined budget shortfall this year and next year estimated at $1.07 billion.

Budget advisers to the legislature and governor agreed the financial picture could worsen if the economy does not pull out of the recession soon, or if Congress fails to pass legislation protecting some or all of a $55 million Medicaid appropriation on which Maryland has been counting.

The money was to come from a Maryland program in which doctors' fees for treating the poor would be doubled to leverage matching funds from the federal government, but without doctors actually receiving any additional payments. Federal health officials have characterized the program as a blatant scam and have tried to stop it, but Congress has intervened.

Michael J. Werner, deputy director of Maryland's Washington office, predicted yesterday that Congress would pass one of three pending bills that would preserve most, if not all, of the disputed Medicaid money.

Even if that occurs, the effects of the recession continue to pummel state revenues: Many Marylanders forced out of work have landed on state welfare and Medicaid rolls.

"The most important factor [in increasing Medicaid enrollment] is the economic downturn and the increase in the unemployment rate," Mr. Sabatini said. "The Medicaid population is usually the last into the work force and among the first out."

But he estimated that 15 percent to 20 percent of the expanded enrollment is due to federal mandates that make more people eligible for the Medicaid program and require the program to offer a wider range of expensive health care services.

Overall, Medicaid costs have exceeded budgeted amounts in the current fiscal year by an estimated $200 million, prompting House Speaker R. Clayton Mitchell Jr., D-Kent, to call it "a runaway program."

"Without restructuring this program, there isn't any tax we could pass that could keep up with this program," he said. "That's the crux of the problem: We've gone away from the basic program and added things on time after time when times were good."

While Mr. Sabatini readily agreed "it is absolutely essential" to restructure the program and make it "more realistic," he said that for the most part that must be done at the federal level.

"Unfortunately, states are finding their hands tied," he said. "Your ability to make any changes in the program become harder and harder to do. The federal government has to give us some more flexibility."

As an example of the problems he faces, Mr. Sabatini said the federal government requires the states to provide non-emergency transportation to Medicaid recipients so they can get to doctors' offices or to drug stores to pick up prescriptions.

That program is costing Maryland $18 million this year, "and I can't touch it. It is federally mandated," he said.

Instead, he said, to save money he has to turn to those programs he has authority to cut, such as a pharmacy assistance program that provides prescription subsidies to low-income elderly.